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The Kudlow Report

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

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Syria 15, Boehner 12, Us 6, Steve Forbes 5, America 5, U.s. 5, United States 5, John 4, Washington 4, Bowles 4, Assad 4, Keith Boykin 3, Robert Frank 3, Keith 3, Parker 3, Clinton 3, Jovan Belcher 3, Kudlow 3, Kansas City 3, Steve 3,
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  CNBC    The Kudlow Report    News/Business. Larry Kudlow. Larry Kudlow provides his  
   unique perspective on business, politics and investing. New.  

    December 3, 2012
    7:00 - 8:00pm EST  

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people continue to freak out about the fiscal cl the big take-away of the show, all right? no vacation without legislation. repeat after me -- no vacation without legislation. all right. i'm jim cramer and i will see you tomorrow! good evening. i'm larry kudlow. the republicans may make another compromise with their latest counter offer on the fiscal cliff. not as many spending cuts as they originally wanted and slight entitlement reform. the white house has just reject this offer out of hand and once again it solely is because it doesn't raise tax rates on the rich. when is obama going to rise
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above that obsession? when will he lose that over rich people and tax rates? i don't know. tonight, i'm is going to try to call his bluff. anyway, also breaking tonight, potential catastrophe if syria uses its chemical weapons. president obama issues a stern warning to syria and i quote the world is watching. and there will be consequences if syria uses these wmds. have we just committed ourselves to another war? and the gun control debate is squarely back in the spotlight tonight after the murder/suicide by nfl player in kansas city, second amendment instead of blaming the sick people who use them. republicans have responded to a fiscal cliff counter offer to president obama. eamon javers joins us now from washington with all the details. good evening. >> reporter: good evening. leapt me walk you through the specifics or at least what specifics we have so far from
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this boehner counter offer and you can see where it falls short from the white house's perspective right in the top line take a look at the details here. boehner and the other house republicans are asking for $800 billion in new tax reform revenue. that's short of the $1.6 trillion that the president would like to see there. also health savings of $600 billion. mandatory savings of $300 billion. revisions of cpa of 200 billion. other discretionary saving 300 billion. they say net savings is $2.2 trillion all told. the white house says this plan is not balanced, and interestingly there's a little side skirmish here between the speaker of the house john boehner and erskine bowls. boehner said this was based on a report that bowles laid out. bawls said no. he said the approach laid out does not represent the
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simpson-bowles plan or the bowles plan. in fact what bowles is is that the speech that boehner based his proposal on was something that bowles had laid out in the middle of the negotiations last year as the mid-point between two sides but bowles is saying today that the mid-point has changed, a lot has changed since last year and it's up to the negotiators to figure out where that mid-point is and where and if they can get a deal, larry. >> we'll leave erskine bowles to his own devices. this is not perfect. i'm not writing it. it's not perfect. here's boehner literally bending over backwards, rising above partisanship and the white house just slaps him down. slaps him down. don't they know how bad they are starting to look? only on the basis that boehner didn't raise tax rates on the rich but does have a tax concession on deductions. this is getting pretty silly. if the president wants tax rates on the rich why doesn't he say
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that. that's all i want, tax rates on the rich. >> reporter: it's clear both sides laid out plans that won't be the basis of the final deal. the white house put out a plan that was basically the white house democratic wish list. now we see boehner responding with a plan that is somewhat like where they were last year in 2011 in the summer negotiating over $800 billion in new revenue at that point. neither one of those plans it doesn't seem is going to be the basis for this final deal. it will be somewhere in between those two points and the white house feels very much they have the political upper hand here. they say their position polls very well and they think the president won re-election for a reason. the speaker said this was a status quo election and the republicans still control the house of representatives. >> eamon javers thanks very much. let's talk some more about this republican counter offer and the white house reaction. we have democratic strategist--
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okay. steve, i go to you because i read the white house reaction to this, and really all they talked about was raising the top tax rates. they had no other things to say, no commendations, no i want to work with you. steve, i know this stuff is not going to be perfect. there's going to be stuff in here that conservatives, supply siders myself won't like. but why does the white house have to obsess about higher tax rates to the exclusion of other parts like entitlement reform and spending cuts? why is this? >> larry, i don't think they are obsessed with higher tax rates they are obsessed with protecting the middle class. john boehner's proposal includes $800 billion in revenue but doesn't specific where it comes from. barack obama has been specific in his plan and look both sides
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have their plans and there's going to be negotiation, will probably end up somewhere in between. i don't understand why we can't raise tax rates on the top 1% of people if we're going to get to a balanced plan. why should the middle class pay more when we have people at the top who can pay more. >> okay. your experience as cbo director and elsewhere. the argument is being made that capping deductions whatever 25,000, 50,000, is that where the itemized deductions are, it's the upper end people who will pay for that, and that produces revenues without damaging the economic incentives, the economic growth effect of tax rate incentives. now i want to ask you, objectively, is it possible that it will affect the upper end income people without affecting the tax rate. >> you can get there. the president's budget has $600 billion raised that way. what's frustrating about this is the republicans could have gone
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back with a specified plan. they knew that was a nonstarter. they did what the president asked. they made a m. they put out a plan that isn't their first choice. the white house said it's not balanced. look what the white house point out. $1.6 trillion ln tax reduction. >> a lot of spending. not to speak of this crazy thing about limitation. >> you know the history. raise the taxes without commitment on the spending they will spend the money. >> infrastructure spending, stimulus tax extenders, the medicare patch, the mortgage plan they are is going to give mortgage credit. a lot of spending increases. you know, boehner is, i think you got to give him an a for being a valiant guy. he's down to 1.75 to 1 on spending cuts to revenues. now they originally wanted to start out with about three.
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the president's plan is zero spending cuts. i'm just saying boehner is down to 1.75 to one. that could be a problem, jimmy. >> we have the 800 billion which i read it and bloomberg is reporting the same thing, 800 billion is 800 billion before of what was based on economic growth, bring in more revenue. this $800 billion is done on a static basis, purely by getting rid of deductions. they are unnamed. this is a huge concession on the part of the house republicans and you're right. a balanced plan according to economists is one that's heavy on the spending cuts, light on the tax increases. that's what the house republicans have give end. still too heavy on the tax increases as opposed to the president's plan which was widely heavy on the tax hikes but harley any spending cuts. that's not balanced. 50-50 isn't balanced. it's widely unbalanced. >> steve, i'll call your bluff.
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i'll call tim quite's bluff. i have the greatest personal regard with mr. quite. i'll call president obama's bluff. the reason i'll call the bluff is this, i do not think at the end of the day that he will let all the tax cuts expire and he'll let the economy go into a recession. i do not believe he'll do that. i'm call his bluff. he will have to make a deal with republicans because, yes, they will blame the republicans for the recession. i know that's what you're going to say. you know what there will be truth but it's obama who gets blamed for having another recession in his second term. it will be herbert hoover obama. he has ta deal. steve, i'm calling your bluff on this whole thing. >> i'm for him for making a deal and i think he will. the republicans could pass a bill tomorrow to extend the bush tax cuts for everybody making less than 250 and then we could have a discussion about the people making over 250 from now to the end of the year but we
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could ensure people making under 250 don't see their paychecks, $2,000 taken out of it on january 15th and january 30th. >> why should they do that? >> why can't they protect the middle class. the president says look i have them in my budget. i went through his budget. 258 proposals on taxes or spending. 15 on medicare. total of 150 billion in cuts. we spend $7 trillion in the next ten years in medicare, five in medicaid. we spend $4 trillion in the next ten years. these are not in the ballpark. we need serious entitlement reforms. >> i think jimmy, if anything the republicans should be much tougher on spending. i think that's the leverage that they have. but i'll go back to you jimmy. i do not believe that president obama wants a second recession in his second term. and with the cbo breathing down his neck with 9% unemployment, i
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mean this is from hennessey's he ti tor trial. the fact of the matter is the economic states here could be devastating and do i not believe that the president is going to risk that and that's why i think ultimately there is going deal. jimmy p., what do you think? >> my only problem with that theory is that i keep -- for all four years i keep waiting for that kind of rationality to emerge. i kept waiting all summer. boy he's going to end up grabbing simpson-bowles at some point. he never did it. i think betting on the president to move to the center and seeing that kind of economic logic, i think it's a real gamble. we have a highly ideological president who is will to go over. >> steve, are you in the senator patty murray camp that say let all the bush tax cuts expire, let them all expire and we'll come back in a month or two or
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three and rewrite them for the middle class. your in that camp to be risk a recession? >> no. i think both side have put down proposals that are not realistic and i think between now and december 31st they will have a negotiation and get to the middle to a more center position. that position has to include an increase on the top rate. otherwise we're taxing the middle class more than they are already taxed. >> boehner has made a huge concession. who cares -- as long as -- more money from the top. i thought the point of this was tax the rich more. the boehner plan does that. >> if the boehner plan doesn't specific where his taxes come from. it says unnamed tax loopholes. >> before -- they moved and said listen we're willing to do $8 hurricane katrina billion in deductions not just for scoring. that's a huge concession. where is the president's concession. >> let me ask doug. that's a great point.
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i don't see the president -- in fact president has become harder line. he was somewhat -- he was somewhat accommodating right after the re-election. he's become harder line. i agree with that point. doug, you know the numbers. once again, i ask you, does boehner's idea of capping upper end deductions work to raise revenues, heaven forbid without damaging the middle class? does it work? >> yes, absolutely it works, and, you know, it's important to recognize we have two different problems. problem number one is the fiscal cliff and threat of recession. raising any more taxes doesn't make any sense. this is politics trumping economic sense. second problem is fixing the debt and there's this debate about how much revenue, how much spending. balance means heavy on spending lighter on taxes and bowles-simpson told us the route to do that is tax reform. >> much more fun by the way to have 4% or 5% growth than to
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equitable about 1% or 2% growth. thank you gentlemen. we appreciate it. now to another controversy. are minorities especially latinos a lost cause for republicans and conservative principles? i say no, but our next guest star parker may just disagree. we'll have a little discuss. folks don't forget free market capitalism is the best true to prosperity. it's true for lower tax and lower spending. i'm kudlow. we'll be right back.
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the republican party will never win another presidential election in my lifetime unless it broadens its base especially with latino and asian immigrants. so what's the best way to pull this off? now writing this week on this very subject here's our next guest star parker, old friend, syndicated columnist and president of cure. hello, star. thanks for helping us out. if you go through the exit polling, okay, i just want to read you this. question should most illegal immigrants work in the united states? should most illegal immigrants work in the united states?
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okay. should they have a chance to apply for legal status? 65%, 65% from the exit polls said they should apply for legal status. only 28% said they should be deported. now, there are a lot of reasons to go after the hispanics, but i still believe the gop has got to change its policy and get rid of this really mean spirited deportation business. >> i think deportation and the immigration question is only one part of the equation as i mention in my scripps column this week. we're talking about a section of the community that's addicted to the government. so one question is what do we do about the welfare state. another question is whether we shut our borders and allow for some type of comprehensive plan to allow for people to come in here and live free. as long as we have welfare,
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larry you're not going to be able to address the immigration problem and say oh, this will be fine for now. >> i understand. to be honest, i agree with you but i think most of them come here to work. i believe that in my heart and i think the statistics tend to show that. >> two between rations ago, larry. two generations ago, not now. >> star u-can't give up otherwise you'll never elect another republican. the same thing will be true with asians. they people come network. they have a good entrepreneurial background. they are church going people. the point is that community going to pay any minds to the gop if they still believe republicans will deport them, throw them back over the border. don't let the kids go to local schools if the parents came illegally. don't let the kids go to texas colleges to get the tuition credit that governor perry wanted and was mocked for it. unfortunately by mitt romney. or the people that have been here 20 years as newt gingrich
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said put them on a path to citizenship. in other words the gop made a mockery out of dealing with hispanic immigrants and i think that's a crucial point in their defeat. >> there's no question that the way that the gop is approaching this immigration issue is similar to generations ago they approached affirmtive action with the black community. these are turn offs when you don't have a clear discussion what a low wage income earner needs. especially on this question because they have family members that are here illegally. larry that's not the major problem we're seeing today with the latino community and the hispanics especially those coming from mexico. this community of people of the last generation have come in and adopted this policy if you will that there's nothing wrong with government dependency. one question to say do they come in and work hard. they work hard and work hard at a low wage. they are open territory important the democrats to say let's unionize you and buy this
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message. until we -- let me finish. let me just finish -- >> i want to win 40% of them. the conversation about free markets and work and entrepreneurship is terrific. don't go on welfare, don't be dependent on government, go to work. >> but that's not what we're seeing. look at the data. you won't get 40% if they buy this idea of collectivism and socialism and this community of people polled very high for collectivism and socialism. >> i don't buy that. >> the data is clear. it's similar to what has happened in black communities. just a few percentages behind. >> i think we can't even have conservatives cannot even begin a conversation with immigrants until conservatives quit the deportation law and order harshness. then i think having put that aside, having shown there's some compassion i think you can go back to that group, george w. bush got 40%, jeb bush got close to 50%, governor perry gets a
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high amount. it can to be done, star. >> i'm not saying it can't to be done but you can't say that even under george bush the policy was very different within the republican party when it looked at immigration in shutting the borders. has it intensified? yes. i'm from california. i understand what you're talking about. this is v-very difficult rhetoric that's been put against this particular people. but that's not the only question when we're talking about the latino community. >> star parker, thank you. i want to talk to you some more. we'll go back to the fiscal cliff. if high end tax rates are successful entrepreneurs rocket higher, you can bet the number of millionaires in this country is going south. that's if high taxes go up. millionaires go down. that's no good. in our land of opportunity, i want more millionaires. and i think the better for them and the economy. robert frank will join us with some very arresting numbers. high tax, fewer millionaires. not good.
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two years ago, the people of bp made a commitment to the gulf.
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bp has paid over twenty-three billion dollars to help those affected and to cover cleanup costs. today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. and bp's also committed to america. we support nearly 250,000 jobs and invest more here than anywhere else. we're working to fuel america for generations to come. our commitment has never been stronger. 28 days until the country plummets off the tax and fiscal cliff. big tax hikes could be coming for everyone but we see also a drastic reduction in the number of millionaires in the u.s. as a result of this tax cliff. robert frank joins us now with the details. good evening, robert. >> good evening. drastic is right. if we go over the cliff the
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wealthy will become less wealthy and fewer americans would become wealthy. the u.s. has around 5 million millionaires with a total wealth of $18.8 trillion. next year there are three possible scenarios all of them depend on the cliff. if we go over the live the population of millionaires would drop by 315,000. their fortunes would drop by $240 billion. if we get a deal but bad for the economy the millionaire population would drop by 26,000 millionaires. if we get a deal and the economy grows then millionaires would grow by 230,000. if there were no threat of a cliff at all the number of millionaires would grow by 443,000 millionaires. that's a 9% increase. the total difference between no cliff and going over the cliff
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is more than 750,000 millionaires or about 1.3 trillion dollars in wealth. i'm looking at the impact of economic growth not taxes which of course if they increase could temper some of that growth. a cliff deal could be worth $1 trillion in new wealth and new millionaires. another reason why those folks in washington need to keep talking. >> a cliff deal where the tax rates don't go up. >> well, just some certainty, and something that results in 2% economic growth then we would get that increase of more than 200,000. >> this outfit was in london. >> correct. >> just had a thought listen towing. they raised the top tax rate from 40 to 50%. they lost money in london, in england and people threat country. >> that's right. >> wonder if that's influenced the research of this group because we may lose money off those higher tax revenues, higher tax rates can produce lower tax revenues. >> these folks have been
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nonpartisan. that's a good point. they lost millionaires in britain. >> know. british government had to top the rate down back from 50 to 45. >> nobody got what they wanted in that one. >> many thanks as always to robert frank. the tragedy in kansas city this weekend has become a national debate after a pro football player commits a tragic murder/suicide. once again the second amendment, the right to bear arms is under siege from the left. we're going to hear from both sides next up on kudlow. [ male announcer ] how do you trade?
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welcome back to "the kudlow report." in this half hour it sure sound like president obama issue ad new war ultimatum this time against syria over chemical weapons of mass destruction. will he follow through and where did syria get those wmds. did you know when president george w. bush lowered tax rates revenues rose and the rich paid more in taxes? that's right. while the poor paid substantially less in tax. steve forbes and keith boykin are going to debate a little later. first up tragedy in the nfl
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after kansas city chiefs linebacker jovan belcher murdered his girlfriend before shooting and killing himself. as a result, the gun control debate back in the spotlight but with more gun regulation actually have made any difference at all? here now is deputy editor of think progress.org and nationally syndicated radio talk show host. lars i'm a second amendment guy. to me guns don't kill people crazy people shooting guns kill people. would a gun regulation have stopped this tragedy? >> only one kind of gun regulation would have stopped this and that would be to gut the second amendment and i don't think igor can reject that. 20,000 laws around the country regulate guns at the state, federal and local level. those laws sometimes are forced a and sometimes not. this young man there was no reason legally to deny him the ownership of a firearm. so the suggestion by bob costas
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who ought to be fired for the comments, his outrageous suggestion that the civil rights of americans all 300 million of us should be taken away and we should be denied the right to own a gun that would be the only way to take it away from jovan belcher is to say no one can own a gun other than military or police. that's an outrageous suggestion. costas ought to be fired. >> larry it's ridiculous we're talking about firing a guy for trying to start a debate about how to control guns in this country. >> i don't want to talk about -- i want to leave the costas situation alone. he said what he said. what i want to talk about igor is the issue of violating the second amendment or greater gun regulation would have stopped this? i mean the question i have -- look, this guy was a big drinker. he suffered concussions. he use ad lot of pain killers. clearly, clearly he had huge mental and physical problems.
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how would the gun thing have played out if he couldn't have got end it? >> we don't know about this one case but we do know is in cases of domestic abuse you really do see this correlation that if there's a gun in the house the chances of death resulting from domestic dispute with a gun are a lot higher than if it's not there. what we're talking about is more sensible background checks. more sensible regulations not gutting the second amendment but making sure that people who shouldn't have guns, people who may have drinking problems, substance abuse problems, that there should be ways to filter those people out so we can begin to reduce gun violence in this country. that's all i'm saying. >> lars -- >> that's absurd. it's absurd. i'll tell use. what you are suggesting is anyone who drinks too much, anyone who is on pharmaceuticals prescribed by their doctor -- >> that's not what i'm suing getting. >> let him finish. >> it is, because in belcher's
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background the current law says unless you're committed to a mental hospital or a convicted felon or have an accusation or a conviction for domestic abuse you can't be denied the purchase of a firearm. what igor is saying somebody smart is going sit down and sort out everybody that somebody smart thinks should be denied a firearm according to igor and his friends at think progress. i'm sure that's virtually everyone in america. what was in belcher's background that would have denied him a gun. >> lars, we have a process in the country of giving people licenses to drive cars. they have to pass a test. they have to show that they are capable of driving a car, of doing so safely, of not causing harm and injury to the people around them. all i'm saying to you is that in a country where the rates of gurn violence are so high, when there's a clear correlation between having a gun in the house and dying from that gun in
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the domestic dispute, why not have a conversation, why not have an open dialogue instead of calling for people to be fired for opening the conversation. you know what? we have a national security problem when the consulate was attacked in benghazi we talked about how do we strengthen benghazi to make sure it doesn't happen again. all i'm asking is to have a conversation. >> let's leave costas to the side. number one is the second amendment to the constitution. the minute the government -- >> it doesn't say anything about you can't regulate gun control. go back and read it. >> hold on. time, place and manner restrictions on constitutional rights. he's right about that. but what in jovan belcher's background that says he doesn't have that capability. >> let's have sensible background checks -- >> i think the problem -- >> we have -- larry, right now i bought a gun a couple of weeks ago. i had to sit down, fill out a
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form although i have a safe full of guns at home and they had to run that through an fbi background check. those background checks are already done right now. >> there's no federal regulations for private purchases. there are no federal regulations for private purchase. there's no gun show background checks. there's a lot of loopholes we have to close. >> there are in many states. >> got to leave it. we're not going decide it but i don't know. freedom is freedom. >> pro-life position, larry. >> larry, if his girlfriend had had a gun she might be alive today. >> yeah, well i don't want to go there either. >> let's have a shoot off. >> crazy people do crazy things and i don't see how you violate the constitution to stop crazy people. i just don't want to do that. thank you both. now, an indication tonight of just how pervasive social media is becoming. united states, spent 121 billion
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minutes on social media sites in the move july. what a waste of time. that works out to to 30,000 years in one month. another waste of time. the data comes from neel centennial's annual social media report. facebook is by far the most popular social network while another site pinterest is one of the break out stars. i don't know. i'll say what i always say, read a good book. anyway, i'm kudlow. next supersyria, president obama warns syria there will be no quote consequences end quote if they dare use chemical weapons. well have we just committed ourselves to another war that's next up.
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when you take a closer look... ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level.
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let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this. the early dividends announced by some companies to avoid higher tax rates are paying off for the ceos and their investors. take larry ellison. he's the ceo of oracle. they are paying dividends three quarters ahead. that means a payday for mr. ellison of $198 million. his shareholders will also do very well and i wish them all happy holidays to beat the tax
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man. now, president obama wants higher revenues and higher tax rates but you know it often doesn't work out that way. in fact from kennedy to reagan to clinton to w. bush lower tax rates frequently increased tax revenues, particularly at the upper end of the income stream. so here now to discuss this we have cnbc contributor keith boykin a former clinton white house aide and forbes media chairman steve forbes author of freedom manifesto, why free markets are moral and big government is not. love that. hey steve and keith. keith boykin i'll give you a little supply side. you'll hate this. this couples from the irs. the irs is going to use the bush cut, the dreaded bush tax cuts. the richest 1% paid $84 billion inflation adjusted dollars more
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between 2000 and 2007. that's a rise of 23%. in other words, their tax rates went down. and their tax revenues went up. now, isn't mr. obama making a mistake? >> well, the rich are paying more in taxes because the rich are disproportionately receiving most of the income in this country. the reality, larry, is that in my lifetime we've actually only raised income tax rates three times. once in 1969 to pay for the vietnam war. once in 1990 when george h. bush recanted his read my lips pledge and once in 1993 when president clinton raised taxes and each time federal revenue increased. the one time when we actually cut taxes in recent memory in 2001, in 2001 but especially in 2001 federal revenue did decrease. it's a basic arithmetic between
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raising taxes and raising revenue. >> steve that's not what the irs shows. that's what's interesting about the tread bush tax cuts that mr. obama wants to repeal in the upper end. i'm not saying in the middle end. in the middle to lower end the same irs data shows the bottom half of taxpayers paid 6 billion less in income taxes, that's a 16% drop. 8 million of them were left off the tax roles all together because of the child tax credit deduction. authenticities me because i don't think it's clear what class warfare produce in our tax code. sometimes lower tax rates can produce higher revenues. >> they produce higher revenue and improve the economy. when the clinton tax increases came in '93 the growth of the economy slowed down. we had a stable money policy then. we didn't have a nationalization of health care so the economy survived it and then spending was cut and tax rates are cut
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like capital gains the economy boomed. same thing in the 1980s. same thing in the 1920s. in the 2001 bush tax cuts they were so pitiful lie weak they finally got real ones in 2003 the economy came back. >> it is true, die read it correctly on the forbes website you would accept higher top marginal tax rates in return for clintonesque policies, did i read that correctly? >> if you abandon obama care just like congress got rid of hilary care, had a stable dollar remember in the mid-'90s the dollar was as good as gold. no massive regulations. we had some deregulation in the 1990s compared to what we have today. and spending on a proportionate basis i would take that trade. >> keith what's your comment on steve forbes. he'll allow those top rates to go up if you all -- if the
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democratic party endorses the kind of lower spending deregulation sound money platform that is often attributed to bill clinton. do you regard that as a forbes compromise? what's your take on that? >> i regard that as a misreading of history. for several reasons. first it's not class warfare when president obama went to go back to the same tax rates when we created 22 million new jobs. secondly when president clinton actually did pass the tax increase in 1993, every single republican voted against it. they all predicted doom and gloom and not only did we create the 22 million jobs, but in addition unlike what steve forbes said the economy grew. gdp was 3% to 4% over the next two years. it's not true what he said. that's a misreading of history. go back and look at the numbers to verify that. and finally -- >> what about the cap gains. one thing you haven't mentioned,
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keith. i have to go steve forbes. the most supply side oriented tax of all is the tax on risk and wealth, namely capital gains tax, risk wealth high risk stock investment. every time the capital gains tax rate is cut, revenues soar as they did under bill clinton. in fact, president obama was asked this in a tv interview during the campaign and he said i know that's what the numbers show but i still want to raise the top rates. if ever there's a supply side tax rates where lower rates produce higher rates it's capital gains. >> that's right. people start taking gains and hold on to what they have. that means capital is not put to work. in the early 1990s the economy was starting to get a real head of steam. not enough to save george h.w. bush but that slowed in '93 and '94. when republicans came in, cut spending, killed hilary care and alan greenspan had a sensible
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monetary policy, the economy started to recover and then clinton got the religion, he cut capital gains. >> steve is giving your man all these kudos and you're not taking them. >> two things first, larry, didn't president reagan raise the capital gains tax rate? >> in a tax reform plan he did. >> exactly. that's my point. was that class warfare when he did that? was that class warfare when he did that. >> revenues went down. >> the question, though, was that class warfare? i don't think you would call that class warfare. it's funny times have changed. >> we cut the top freight 50 to 28%. >> and george h.w. bush brought it back up again because he lost so much revenue. >> that's the great part about history you read what you want to read. thank you gentlemen very much. up next on kudlow, president obama issues a war ultimatum to syria. if they dare use chemical
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weapons and my question where did syria get those wmds. they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader. the heart of a one-to-one relationship. together for your future. ♪ bp has paid overthe people of bp twenty-threeitment to the gulf. billion dollars together for your future. to help those affected and to cover cleanup costs. today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. and bp's also committed to america. we support nearly 250,000 jobs and invest more here than anywhere else. we're working to fuel america for generations to come. our commitment has never been stronger.
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there's a low of tens in washington right now. there's a moment for a wise crack and a little fun and no one is better at it than senator john mccain. watch what happens when he's introduced by senator john kerry. >> senator mccain. >> thank you very much mr. secretary. [ laughter ] >> thank you very much, mr.
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president. [ laughter ] this is what happened when you get two losers up here. we're just having fun. >> good to see a little bit of fun. to the breaking news in the middle east. there are reports tonight that the u.s. and allied intelligence have detected syrian movement of chemical weapons components the use of which is a red line for the united states. take a listen to president obama this afternoon. >> i want to make it absolutely clear to assad and those under his command, the world is watching. the use of chemical weapons is and would be totally unacceptable. and if you make the tragic mistake of using these weapons, there will be consequences and you will be held accountable. >> all right. talk about this here now is syndicated radio talk show host my great pal john.
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john, the president said there will be serious consequences. does that mean we'll go to war? >> we are at war. this is a civil war in syria and the u.s. is sponsoring the coalition that means to regime change in damascus. that's the coalition of cairo, morrissey ankora. we're at war. >> the question is coming back to the president's statement i thought, john, we detected movement whether it's parts or trucks or whatever, if we detected movement, movement that might lead chemical weapons let's say, for example to go to hezbollah we should take action we the united states. >> the sad story, larry, is that april 5th, 2003, iraq moved its wmd, all of it including weapons systems that can launch the grad and supergrad missiles from iraq into syria, into assad's hands. they did this under the control of their russian allies. syria still has russian allies
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with, has its russian allies supervising or at least watching the wmd in syria. the u.s. knows the. this is a game being played by politics. mr. obama is not speak being to assad. assad is beyond hearing. he's speaking to moscow. don't let this happen. he's talking directly to putin. >> let me go back to your other fascinating point opinion you say back in 2003, of course this was the weapons of mass destruction that president bush and the intelligence agencies around the world never were able to discover. you're saying, john, that the russians carted or flew those wmds, these were chemical weapons of mass destruction that the russians carted those wmds from iraq to syria but, in fact, there were wmds in iraq all along. . it to be very careful. russians cooperated in the transfer of major weapon systems. the republican guards, the
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ability to launch the missiles and the wmd and to marry the war head with the missiles. the russians supervised all of that for saddam hussein. the night of april 5th two convoys left baghdad one with the russian ambassador headed to damascus the other headed through the area of north of baghdad with all of the major weapon systems. they crossed the border. that's the last i can report on where they are. the russians know where the wmd is. this is a game that's not being played regionally any more. this is moscow. this is beijing. this is washington. all involved in the civil war. the talk of wmd now, it's very late in the game. if we're looking for a reason to go to war that might be the reason why the president and secretary of state are using the term red line. >> is that, in fact, his goal. is that, in fact, his goal. does he now want to -- i don't know whether it's air bombing, john, or drones or troops on the ground but is it time now? is that what he's saying? >> all my information points to
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that fact, larry, that we're already watching the early stages of the invasion of syria. that's all my information, larry. >> who will be invading? >> turkey. turkey under the agents of nato. it will look a lot like libya in the beginning. the whole region is unstable. the recent conflict between gaza and israel and jordan, larry -- jordan is extremely unstable. the king is extremely fragile. this is not the same as libya which was an isolated state in north africa. the wmd exists. i don't in any way belittle that fact. but this is state to state policy we're witnessing and let's not pretend we're too delicate to reveal the fact that the wmd from iraq is now parked in arsenals in syria and we know about it. >> john just the last 20 second. does this mayhem you're describing open the door for more power and influence for al qaeda, hezbollah and all the terrorists all the jihadist groups. does it open the door for them?
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>> gangsters will profit from the failure of states, yes. >> wow. that's a tough sell. maybe we ought to get in there and do something about that before the situation gets even more out of hand. you say jordan could actually go down, john, is that what you're suggesting. >> my information is the king is extremely fragile, under pressure from the same muslim brothers that took egypt to the dark side. >> as always thank you very much. that's it for this evening's show, folks. thanks for watching. i'm larry kudlow. we'll be back tomorrow night.
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